Officials of Japan’s Financial Services Agency ordered the closure of Taisho Life Insurance Company on Monday after Yoshihiko Kokura, the chairman of its principal shareholder, Claremont Capital Holdings Inc., was arrested for fraud.
Taisho, the smallest of Japan’s 17 major insurance groups, was taken over by Kokura and Claremont last March in an effort to stave off insolvency. At the time it’s solvency ration had sunk to 67.7 percent – the minimum ratio is 200 percent.
“Taisho Life’s financial situation is extremely severe, its asset management conspicuously inappropriate and if it were to continue its insurance business, this could lead to a failure to protect insurance policy holders,” FSA Chief Masaharu Hino told Reuters news Agency.
Administrators will take over most of the company’s business and wind up its operations. They will continue to pay policyholders.
Japanese authorities raided the offices of Claremont, Taisho and Kokura’s home on Monday, and seized a number of documents, Reuters reported. They suspect Kokura of trying to swindle Taisho of 8.5 billion yen ($80 million).
Caught in a squeeze between low rates of return on investments, and high claims payment obligations, Taisho’s failure is the fourth in the Japanese life insurance sector in the last three years.
Topics Japan
Was this article valuable?
Here are more articles you may enjoy.
AIG Sues Newly Launched Dellwood Insurance and Its Founders 
USAA to Lay Off 220 Employees 
California Chiropractor Sentenced to 54 Years for $150M Workers’ Comp Scheme 
Progressive Records Five-Fold Increase in Q1 Net Income 
